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Confronting tourism risk

We only have to read casually the newspapers or listen to the media to realize that tourism professionals work in a world that is filled with a great deal of risk.

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We only have to read casually the newspapers or listen to the media to realize that tourism professionals work in a world that is filled with a great deal of risk. All too often these risks are ignored until they become crises. Indeed, crisis management has become a way of life for government officials, leaders of major corporations, and tourism professionals.

Crisis management skills are an essential part of modern life, but often crisis management signifies a failure of good risk management. Often the best way to avoid a crisis is by having proper risk management skills. Unfortunately, all too often tourism leaders choose a psychological state of denial and thus wait until a crisis develops rather than acting to prevent the crisis before it happens. The reasons for this refusal to act are many.

Some executives argue that risk management adds nothing to the bottom line; others argue that they are prepared to risk the possibility of a crisis rather than pay for the certainty of remedial actions. Lastly, others simply deny reality and do not believe that the risk a common assumption among travel professionals is that the less they talk about risk the better.

To be in the tourism business is to experience risk. While there is no way to avoid risk being aware of the various types of risks, the cost of the risk’s consequences ought to be part of every travel and tourism, CVB and National tourism office’s plans. The consequences of failure are simply too great. A review of professional travel conferences and meeting and event planners, however, indicates that there is still a sizable number of professionals who believe that the less one talk about any threat the better.

Despite the mistaken policy of see-no-evil/ hear-no-evil on the part of too many travel professionals, terrorists have often targeted the tourism industry. For example in recent years criminal acts or terrorist attacks have occurred throughout the world. These attacks have been against major events, such as sporting events, hotels, transportation facilities (airports or railroads) or visitor attractions. This overlapping means that event risk managers working in the tourism industry must view not only a specific site or activity but also must also find ways to lessen the risk impact from collateral relationships.

For example, an event may officially begin at the opening ceremonies, but in reality, the risk to the event begins from the time that the delegates land at the local airport or arrive at the site. Event risk managers then must think about the interrelationship between such industries, to name a few, as: airlines, cruses, food services and restaurants, hotels and lodging, beaches, convention halls, stadiums, nightclubs, and museums.

To help put these risks into perspective Tourism Tidbits offers the following guidelines”

-Poorly managed risks can become tourism crises. The key question that every tourism executive and employee needs to ask him/herself is how much can I afford a tourism crisis? What are the consequences of this crisis and would the crisis be more expensive to fix then the cost of managing the risk?

-No amount of insurance can cover all losses. Insurance can help a tourism industry to recover its economic footing but never its reputation. How much will your image suffer? How much extra marketing will you need to do in order to begin to recover your image? Travel and tourism are about image and no travel and tourism location is without competition or is guaranteed survival.

– Professionals in the travel and tourism industry must constantly be award of paradigm shifts. The worldwide war against the tourism industry has resulted in the deaths of many thousands of people and the loss of hundreds of millions of dollars in property value. The increase in travel and tourism risk means that specialists on a one-by-one basis need to begin to ask challenging questions. For example, a risk management team needs to start off by asking simple questions such as:

• Is there a level of acceptable risk?
• Can our tourism entity afford insurance to cover the costs of these risks?
• Have we prioritized our risks?
• What are the consequences of a risk management failure?

-Event and tourism risk managers must develop ways in which to classify threats. Is the threat/risk to the client (guest) staff member, locale’s health or environment or its economy? Event risk managers need to ask from whom is the risk emanating? For example, guests are often both the victims of a risk and also the risk generators. Staff members may produce criminal risks to visitors, but in turn may be the visitor’s victim.

In determining risk the risk manager needs to ask such questions as:

• Is there the potential at my site, locale or event for mass death?
• Should the risk materialize what would the economic cost be?
• Is the event/site a place with world -wide iconic value?
• How much media coverage would the risk’s actualization cause?
• How long would the fall-out from the risk’s actualization last?

-No tourism professional has unlimited resources. Thus a decision to protect point/event A may result in accepting a risk at point/event B. To help determine which risks are one’s top priority ask the following questions.

• Which risks have a low probability of occurring and a low impact should the risk occur?
• Which risks have a low probability of occurring and a high impact should the risk occur?
• Which risks have a high probability of occurring and a low impact should the risk occur?
• Which risks have a high probability of occurring and a high impact should the risk occur?

To begin to deal with some of these critical issues here are some basics that every travel and tourism entity should request of a risk management professional:

-Do on a regular basis a full risk assessment. Someone who is not part of the organization should always accomplish this assessment. Doing an in-house risk analysis is as dangerous as doing one’s own yearly medical physical. Tourism entities or events should ask an outside firm or specialists tell them: where are they most exposed to loss? What techniques are they using to minimize this (these) loss(es)? How often do they actually implement these techniques and are the results monitored and compared with previous results?

-What is the risk of poor customer service? Poor customer service is rarely seen as a risk, but in tourism it is. Tourism is an industry whose clients chose to it. Poor customer service is not only a manifestation of poor security but also is a risk in that the client may not only choose never to return. Rude employees also cost tourism companies in negative word of mouth publicity. Event risk managers will want to know if events are managed efficiently and with on time. Event risk management is not just about crime and terrorism, or physical safety; it is also about the reputation and viability of one’s tourism product.

-Create timelines. Tourism and event risk managers should monitor and evaluate the results of their risk assessments and maintain a time line of on how past risks have changed. Changes in risk may be the result of new political, economic, social and situations. Risk changes can come in the form of pro-active site hardening measures, training, and/or new managerial techniques.

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